CMS invests for post-Covid landscape

Friday, June 26, 2020

Central Mailing Services (CMS) has signed for a second Kern 3500 envelope enclosing line as it prepares for the post lockdown business landscape and braces itself for an imminent rise in mailings.

CMS: new factory makes socially distanced working easier
CMS: new factory makes socially distanced working easier

Managing director Mitesh Chouhan said that while business had been “tough” since March, he wanted the additional capacity to enable the firm to take on more critical mailings, which he said had spiked in recent weeks.

The Birmingham mailing house only signed for the enclosing line earlier this week, but the installation has been pencilled in for two week’s time.

“Because they’re modular machines, Kern holds all the parts there so they can bolt it together and then deconstruct and deliver and recommission on site pretty quickly,” he said.

The 3500 was financed though CMS' existing bank, Handelsbanken, rather than a government backed coronavirus loan, but Chouhan said this was more than made up for the fact that he secured a deal for the refurbished line at less than 50% of its new list price.

According to Chouhan he paid £104,000 for the machine “so that is a good price as typically those are a quarter-of-a-million-pound machines, which is why we bought it during Covid, because the deal was so good.”

While the firm has been running as a “skeleton operation” since lockdown began and was running at around 50% of pre-lockdown volumes, Chouhan said that it had been handling a lot of critical work.

“For example on [last] Friday we had a campaign for 250,000 NHS letters and that needed to be mailed on Friday and Monday. This machine can enclose at 22,000 per hour, so we basically bought it do with all the high-volume critical work that is coming in.”

CMS’s refurbished Kern 3500 joins an existing 3500 installed in 2018.

It’s configured with options including K971 high speed cut sheet input channel, OMR, 2D & OCR codes reader, a GUF grouping and folding module, two ZS high capacity servo controlled friction feeder modules (two feeders per module), high capacity envelope hopper, capable of holding up to 3000 envelopes and a vertical stacker with a two metre conveyor.

While CMS is running reduced staffing to reflect a reduction in work and to enable it to adhere to social distancing guidelines, the business is still running two production shifts and overtime, when required. Chouhan added that the layout of its new factory enabled to maintain 2m social distancing easily, something he planned to continue even when the rules change to 1m, and it carried out cleaning between shifts.

“The door handles literally shine they’ve been so polished. We monitor the CCTV too and staff have access to masks, gloves and sanitiser stations, it’s very important to me that we protect the workforce."

Only four out of the firm's circa 20 production operatives were furloughed. 25 staff in total across the business were placed on furlough.

Pre-Covid Chouhan said the business employed 100 staff, but it had put 25 on furlough and let another 25 go permanently.

“We reduced our headcount and are investing in faster, more efficient machinery. Machines are cheaper than people and that’s what Covid has taught us, to be lean.”

While the business is still running at 50% capacity, Chouhan said he remained cautiously optimistic that things would pick up from July onwards.

“Weirdly, while August is one the trade’s quietest months, we’ve already got a lot of work booked in. Just on the DM side we have two companies that have booked in 1.6m items between them, a holiday company and a retailer. We’ve got a lot of paper wrapping booked in too.

“For us, furlough ends at the end of July, so going into August we won’t have anyone furloughed, so we have to seriously go for it from then.”

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